Governor Scott's Transformative Agenda and Fiscal Year 2023 Budget Proposal

“In my 21 years in public life, there has never been a more transformative moment. We have, within our grasp, the chance to combine good ideas, thoughtful legislation, and unprecedented financial resources into a better, brighter future – where there are good jobs, affordable homes, and every community is thriving; where every kid is getting the best education, whether they go to the largest school or the smallest; where families keep more of what they earn; and where a healthy and vibrant economy in all 14 counties allows us to protect the vulnerable and invest in the things we care about most. My friends, the budget I present to you today was built with these outcomes in mind, to make the most of this historic moment.”

- Governor Phil Scott, January 18, 2022

 

In January 2022, Governor Scott presented a vision for a bright and prosperous future for Vermont, and set a policy agenda and budget that moves the state further towards this vision.

Governor Scott’s agenda furthers his goals to grow the economy, make Vermont more affordable and protect the vulnerable with a focus on:

You can hear more from Governor Scott on his vision and policy strategy by watching or reading his State of the State and Budget addresses:

Click here to WATCH Governor Scott’s 2022 State of the State

Click here to READ Governor Scott’s 2022 State of the State

Click here to WATCH Governor Scott’s 2022 Budget Address

Click here to READ Governor Scott’s 2022 Budget Address

Click here to see Governor Scott's proposed Fiscal Year 2023 budget 

Click here to see Governor Scott's transformative proposal for one-time federal money from the American Rescue Plan Act

 

Read Governor Scott's Past Addresses:

 

Read More from the Scott Administration:

 

Governor Scott’s State of the State Address (January 5, 2022):

It is our tradition at the opening of the legislative session to come together and chart our course for the work ahead.

Whether in times of peace or war, prosperity or depression, those who came before us felt the same hope and optimism we share today, ready to do the work to take on new problems and solve those that have eluded us for years.

It is a day I have been a part of many times. I have delivered, presided over, or sat through 21 of these addresses. And I have always felt that on this day, with all of us together, anything is possible.

In this moment, we get to decide where we will focus over the coming months, which challenges we’ll work on and those we’ll set aside to do what is best for our fellow Vermonters.

***

It has been almost two years since we were last together in one room. I know your decision to legislate remotely was a difficult one, but it was the right one, for now. And it proves that our government – through great adversity – can and will move forward.

But I think most agree remote legislating doesn’t have the same energy and emotion, comradery, cooperation, and occasional conflict that are essential for good policy making.

And it’s left many feeling a bit nostalgic for the chance to see friends, even those we don’t always agree with; for the ideas that come up in cafeteria conversations and go on to become bills and then laws; and for the privilege to be recognized on the floor, to represent your district, to make your case, and to know that the voice of your constituents has been heard.

Friends, we will get through this and be back together soon. But for now, I know we will find a way to take on our challenges, to see them through, and to make a difference for those we serve.

***

There is no doubt the last 21 months have been difficult. But if we are willing to make the most of the silver linings, there is much to be gained.

Thanks to the work of our Congressional Delegation – especially Senator Leahy – we’ve received billions in federal aid. And with that aid, we came together to fund significant needs.

We rolled up our sleeves to achieve the highest vaccination rates in the country and then kept them rolled up, went to work, and passed historic investments in housing, broadband, climate change, water and sewer, and economic recovery – dedicating over $600 million to transform communities, large and small, across the state.

I am pleased to report that nearly half of this funding has already been approved for release, with public servants in just about every agency moving projects forward every day. And that is on top of the more than $500 million we spent on infrastructure through our typical funding sources.

These investments will help reverse decades of economic inequity in every single county.

This has put us on a new path, creating more opportunities for the future than most of us thought possible just a few short years ago.

For these reasons, I can report to you today that the State of the State is strong.

And we are growing stronger every day, so that every new generation in every county and every community is healthier, better educated, and more secure and prosperous than those who came before.

***

To get there, we must be clear about the challenges we face, the problems we must solve, and the people and places that need our help most.

Continuing to navigate out of this pandemic remains one of those issues. We know the next several weeks are going to be incredibly challenging across the country, and we’ll be focused on this issue. But for today, let’s focus on the future.

Because we have to learn to manage life with this virus and cannot let it derail us from addressing our most fundamental challenges: Our desperate need for more people in our communities and more workers to fill the tens of thousands of jobs available in Vermont today.

In January 2020, when the new virus was just a fleeting mention on the nightly news, I stood before you and shared my biggest concern: That for years our working-age population and the number of kids in our schools had been shrinking unsustainably, creating deep economic inequity between the northwestern part of our state and everywhere else.

I reported at the time that only three counties had added workers while the other 11 had lost them. Today, all 14 have lost workers, even Chittenden. And Windsor, Windham, Caledonia, Bennington, Essex and Rutland are down 15% or more since their peak. Statewide, we have seen our workforce decrease by nearly 30,000 since 2010.

It’s clear that while the pandemic didn’t create this problem, it has made it much, much worse.

***

The hardest part of addressing our workforce shortage is that it is so intertwined with other big challenges, from affordability and education to our economy and recovery. Each problem makes the others harder to solve, creating a vicious cycle that’s been difficult to break.

Specifically, I believe our high cost of living has contributed to a declining workforce and stunted our growth. As we lose Vermonters who cannot afford to live, do business, or even retire here, that burden – from taxes and utility rates to healthcare and education costs – falls on fewer and fewer of us, making life even less affordable. 

With fewer working families comes fewer kids in our schools. But lower enrollment hasn’t meant lower costs and from district to district, kids are not offered the same opportunities, like foreign languages, AP courses, or electives. And with fewer school offerings, it is hard to attract families, workers, and jobs to those communities.

Fewer workers and fewer students mean our businesses struggle to fill the jobs they need to survive, deepening the economic divide from region to region.

And for years, state budgets and policies failed to adapt to this reality.

***

But here’s the good news: This is the moment we’ve been waiting for and working towards.

We’ve been making headway on these issues for the last five years, putting ourselves in a position to reverse our workforce trends, revitalize every county in our state, and secure the future we’ve envisioned:

One where Vermonters can find a good job, a good school, and an affordable home in each of our 14 counties and 251 cities, towns, and villages. Where kids in the smallest communities have as many opportunities as kids in the largest. Where young families can afford to enjoy all our state has to offer. And where a strong economy generates the tax revenue to easily serve all people, protect the vulnerable, and invest in the things we care about most.

I am more optimistic than I have ever been that this future is within our grasp. But we have got to work together, so we do not squander this once-in-a-life time opportunity to truly transform our state.

Five years ago, I said, “when you are in a hole, stop digging.” My friends, today I am happy to report: We are out of that hole, and we are sitting on a pile of bricks, mortar, lumber, and steel.

So, let’s grab hold, and start building.

***

Now we know this will not be easy. It is going to take all of us committing to this goal and pulling in the same direction.

And I want to acknowledge up front that I will not have all the answers. Many solutions will come from local communities and legislative committees.

You can expect proposals on my end to be geared towards workforce. Because whether it is training and recruitment, childcare, tax policy, housing, healthcare, infrastructure, or climate change, we must reverse our workforce trends.

And just so we are clear, for any legislation to have my support, it cannot make this problem worse.

If we look at everything through this lens, if we have the discipline to stay focused and don’t get distracted by the antics of an election year, I have no doubt we can succeed far beyond the incremental steps of a typical session and make significant, lasting, transformative leaps forward.

***

So, let’s start with the people already here and do more to connect them with great jobs.

First, our internship, returnship, and apprenticeship programs have been incredibly successful, not only giving workers job experience, but also building ties to local employers. To improve on this work, the Department of Labor assists employers to fill and manage internships statewide and we’ll invest more to help cover interns’ wages.

And let’s not forget about retired Vermonters who want to go back to work and have a lot to offer. I look forward to working with Representative Marcotte and the House Commerce Committee on this issue and may others.

Next, let’s put a greater focus on trades training. And here’s why:

We all know we need more nurses and healthcare workers. And as I previewed with Senator Sanders and Senator Balint earlier this week, I will propose investments in this area. But if we don’t have enough CDL drivers, mechanics and technicians, hospital staff won’t get to work; there will be issues getting the life-saving equipment and supplies we need; and we will see fewer EMTs available to get patients to emergency rooms. If we don’t have enough carpenters, plumbers and electricians, or heating, ventilation, air handling and refrigeration techs, there are fewer to construct and maintain the facilities in our healthcare system or build homes for the workers we are trying to attract.

If we make smart changes to current policy, we can open the door to Career and Technical Education, giving kids multiple paths to a lucrative career and filling these crucial jobs.

But more importantly, we need to do more to encourage students to pursue these programs. And I can say from my own personal experience, it is not easy to choose the CTE track, even when it is your passion.

For far too long, we have not done enough to point students toward these great opportunities to build a real future for themselves. It is time we end the stigma around CTE. Because the fact is, many of the smartest, most successful people I know are in the trades.

So, let’s all recognize that it is just as important, valuable, and impressive to become an electrician, welder or EMT as it is to go to Stanford, Dartmouth or Harvard.

***

Our strategy to grow the workforce cannot just be about training, it must be about meeting the needs of families. That’s why my workforce proposals also include things like housing, affordability, and jobs.

Twice over the last five years, we have passed the largest investments in housing in the state’s history.

Last year, we focused heavily on permanent housing for homeless Vermonters. As a result, we have built about 800 new affordable units with another 800 under development. And we have helped over 1,300 struggling families transition out of homelessness, giving them the dignity and security of permanent homes to regain their independence.

And to help with heating costs and reduce emissions, we are working to deploy the $20 million in weatherization funds passed last year.

This is important but it is not enough, and it does not get at the heart of our problem: the lack of decent, affordable homes for middle income families.

Without it, workers we have can’t afford to move up and the workers we want can’t afford to move in.

We must recognize housing policy is workforce policy. If you will work with me in budget adjustment to allocate $80 million more, we can show we are fully committed to this cause. And in the budget I will present in two weeks, you can expect to see another $100 million – because it’s time get serious about putting the benefits of a good home and a good investment within the reach of every Vermonter.

***

Housing is not the only area that remains unaffordable. Our fiscal discipline over the last five years – including multiple budgets that did not raise taxes or fees – narrowed the gap between the increasing costs of state government and growth in paychecks. 

But the fact is, Vermont is still ranked near the top of the list when it comes to tax burden and cost of living. So, we should do our part to keep the costs of government policies from rising faster than peoples’ wages. Because when these costs rise faster, we are pushing people down the economic ladder. But when take-home pay is growing faster than these costs, we are helping people move up.

So, I will put forward a balanced and progressive tax relief package with a focus on those who need it, like retirees, middle income families and young workers.

We all want to see Vermonters take home more in their paychecks and for every family to have some breathing room once their bills are paid. If we work together, we can make this happen this session. 

***

We know we need more workers, and that also means we need to keep the good jobs we have and add more of them.

That is why I will propose expanding the Capital Investment Grant program, which we created with $10 million last year, but we received applications for six times that amount. This program is helping employers, like childcare and senior centers, museums, theaters and agricultural businesses, enhance their facilities and keep good jobs and services here – so let’s do more.

We are also continuing our work to attract new businesses from Canada with the help of our new business recruitment office in Montreal.

And let’s also help our most cutting-edge employers, like Northern Reliability and Beta Technologies, become global leaders to grow our tech and climate sectors right here in Vermont.

***

As I have said many times, if we build the strongest Cradle to Career education system in the country, it will be one of the best economic development tools we could ask for.

And this means looking beyond a preK-12 system.

We have worked together to increase the State’s investment in childcare by over 30% since I took office. To build on that, I will propose changes to our Childcare Financial Assistance program to increase access to quality care and learning.

And alongside this focus, two years ago at my request, we started down a path toward universal afterschool and summer programs. Last year we joined Senator Sanders, schools and private partners to take some big leaps forward. Through our Summer Matters initiative, we added 30,000 more summer camp slots and about 240 more weeks of programming. And we will do it again because we should be offering these opportunities to young Vermonters, year-round.

***

This initiative came at a time when our kids desperately needed to reconnect with friends, get outside and just have fun.

Because we must acknowledge that many of the difficult decisions we made to keep people safe before vaccines, while necessary at the time, had negative effects. These are the real-life consequences we must consider when thinking about returning to restrictive pandemic measures.

Just look at our hospitals, where many patients are sicker and getting admitted because of deferred care. Or our mental health system, where demand for crisis services has never been higher.

And when it comes to our kids, who lost out on months of full in-person instruction, not to mention music, drama, sports, field trips, dances and all those normal interactions we took for granted, this pandemic has taken a significant toll.

The strain was far too much for some, sending them to the ER for mental health needs. And while it was less severe for others, the grief was still felt.

Last spring, I heard directly from students about the impact of hybrid learning. A 13-year-old from Fair Haven put it best: She said, “Not being able to enjoy school and socialize with friends has made a lot of us feel lonely and down.” And she asked me to “bring back some enjoyable activities so students will look forward to going to school.”

From academics to extra curriculars, we have a lot of ground to make up. So, the Agency of Education, Department of Mental Health and schools are putting $285 million in recovery dollars to work to address social, emotional and educational gaps.

I know teachers, parents, school nurses and administrators are working harder than ever to make up for these losses, all while dealing with high case counts. I thank every single one of them. I know it is not easy, but it is so much better for students to be back in school.

Please know, we are in this together and for the sake of our kids, we must keep moving forward.

***

As I said, they are not the only ones impacted by the State of Emergency, which is why we need to remember that COVID-19 is not our only serious public health challenge, and we cannot continue to address just one, at the expense of the others.

Our mental health system is facing serious stress and it is not uncommon for emergency departments to have many people in mental health crisis, as they await treatment. Which is why we will continue to increase the number of mental health beds throughout the state.

And I’ll ask you to expand our mobile crisis pilot and suicide prevention model to make sure when our friends and family, neighbors and co-workers need us most, we have the tools to help.

And while we did our best to support those struggling with addiction during the pandemic, the data is clear: It was not enough. So, my budget will expand prevention, treatment and recovery efforts.

Supporting those dealing with substance misuse and addiction has been a priority and a commitment we have all shared for nearly a decade. No matter what other challenges come our way, we cannot weaken our efforts to reduce the number of Vermonters struggling with drugs and alcohol, the number of families it touches, and the lives it claims.

***

This work not only keeps people healthier, but it also makes communities safer.

As we modernize law enforcement policy, we cannot forget that police and other first responders are essential to public safety. And this is another area where we have a significant labor shortage.

The work we are doing to continuously improve fair and impartial policing is necessary and important. And much of it is being led by our state and local officers themselves. We have also taken meaningful steps like universal body cameras, new training and a statewide Use of Force policy.

There will always be more to do, but we must account for what is already being done and make sure we continue to have the tools and the people to serve and protect our communities.

***

Law enforcement, human service and healthcare workers cannot do it alone, so let’s recognize that safe communities start with strong communities.

Investments in infrastructure, like water and sewer, broadband and climate change resiliency will help increase economic equity and strengthen our communities from region to region.

This is exactly why the American Rescue Plan Act (ARPA) investments we made last year were so important. For example, with the wastewater funding going to Westford, the town can move forward on new housing and bring small businesses to its town center, a plan that has been 16-years in the making. We are also working to help Montgomery with its plans for a similar project that will also bring jobs and housing. And with our investments in broadband, we will bring fiber to people, who for far too long, have had little or no access to this service. But only a portion of the $1 billion proposal I presented was funded, so this year we will ask for the rest of it.

Just making the investments is not enough because it remains difficult and expensive to build here in Vermont. So, let’s continue expanding tax credits for our downtowns. And let’s add more tools to revitalize vacant, and once vibrant properties, including some of our shuttered campuses like Green Mountain College in Poultney and old industrial sites like Jones & Lamson in Springfield.

There are many ways to strengthen our communities and we finally have the funds to do this work.

But we must ensure our regulatory system does not become the bottleneck that holds us back. So, I will once again ask you to bring our 51-year-old land use law into the 21st century. Given the time constraints on the federal money and the need to move quickly to truly make the most of this incredible moment, the time to modernize Act 250 is now.

***

This is what can be achieved this session: Major additions to our education system that make it the best in the nation. Good jobs and an affordable cost of living, so families can prosper. And safe and healthy communities with thriving town centers that – along with our incredible natural resources – offer the best quality of life in the nation.

This benefits the people here now and gives us the workforce recruitment tools we need.

But we can’t rely on that alone. We have to tell our story. We have to make sure people know all we have done to make Vermont such a great place for families and workers, and we have to make it easy for them to move here.

So, I will again propose a comprehensive relocation package that makes the best use of marketing dollars to identify and directly reach people who have past ties to or current interest in Vermont, like young adults who moved away after graduation or those who enjoy the outdoors.

In addition, my budget will support the Senate’s worker relocation incentive program – with some changes – to bring in more families who contribute to our communities, schools and economy.

And let’s finally eliminate the tax on military pensions because if we want members of the military – after a 20-year career – to join our workforce, we must be able to compete with the 47 other states that have already greatly reduced or removed this burden.

In the past, we have worked with Secretary of State Condos to improve our licensing laws, becoming one of the first states to give credit for experience gained in the military, accepting more credentials from other states, and speeding the process for licensed alcohol and drug counselors. This is putting more skilled professionals to work, so let’s further modernize these laws.

And when bringing in more people, we should go beyond our borders to welcome more refugees – especially the Afghan allies who served alongside our servicemen and women in the Global War on Terror. Because the truth is, we need them. And more importantly, welcoming refugees is the compassionate thing to do; it is the right thing to do; and it is the American thing to do.

***

There is no doubt we face significant challenges and fixing one is dependent on fixing several others. But we now have the resources to make a big difference and that is exactly why this is such a unique moment in our history.

Late last year, our nation lost a great American. General Colin Powel devoted his entire life to our country. He fought for freedom and democracy, liberty and equality, even though – because of the color of his skin – those ideals weren’t always equally applied to him.

With a thoughtful and honest approach, he viewed the world from the center and always looked both ways before making decisions.

General Powel believed, “There is no end to the good you can do if you don’t care who gets the credit.”

I guess that’s why he never ran for office.

But we did. And the way I see it, there is one thing that could pull this incredible opportunity out of our reach, and that is election year politics.

So, let’s remember the work done here and across state government, is not about us.

It’s not about how many votes we get, how many followers and likes we have on social media or how many times our name is in the news. It’s not about checking things off a national political agenda, or proposing policies to raise money, earn endorsements, or to have better answers for all those special interest questionnaires. 

It’s just not about us.

It’s about the workers who want to know they will still have a job as we continue to manage COVID, like the waitress in Burlington who told us she was worried about her paycheck, and her kids, if they get shut down again.

The high school senior who is not planning on going to college but has talent for a trade that could lead to a lucrative career or a business of their own.

The communities like Sheldon and Orleans that depend on the local plant for jobs and economic activity.

The kids like that 13-year-old Fair Haven student and thousands like her who need us now more than ever and are relying on us to leave them a healthy planet.

It’s about the people of Vermont. We are here for them.

Because the fact is there is no amount of money, infrastructure projects, or government policy that can rebuild and grow our communities without people. The volunteers in the fire department and on the planning commission. Those who step up to coach and train, mentor and inspire our kids. Neighbors willing to drive someone to pick up groceries, to visit a loved one, or to get their booster.

Our success through the pandemic and the opportunity in front of us is thanks to the hundreds of thousands of Vermonters who stepped up. But there is more work to do, and it is going to take all of us, recognizing that this moment is one of service.

So, for those still looking for a way to give back, this is your time. Help out at a place like Jenna’s House in Johnson or Josh’s House in Colchester – both started by parents who experienced incredible loss but transformed their grief into good, helping others and saving lives. Join a school board or become a substitute teacher. Sign up and train to be an LNA to start on the path towards your dream of a career in healthcare. Volunteer at the senior center, take that extra step to welcome a refugee family to your town or simply call a friend who may be struggling through hard times.

It’s the little things, along with the big, that will make certain we meet this moment.

We have a big job ahead of us, but a brighter future is within our grasp:

The best education system in the country; resilient kids and thriving families; clean water, and a healthier planet; strong communities with good jobs, affordable homes, and vibrant downtowns in every corner of our state.

Friends, this is all within our grasp. We just need to reach out – together – and take hold.

###

 

Governor Scott’s Budget Address (January, 18 2022):

Two weeks ago, I shared the optimism I have for the opportunity before us. In my 21 years in public life, there has never been a more transformative moment.

We have, within our grasp, the chance to combine good ideas, thoughtful legislation and unprecedented financial resources into a better, brighter future: Where there are good jobs, affordable homes and every community is thriving; where every kid is getting the best education, whether they go to the largest school or the smallest; where families keep more of what they earn; and where a healthy and vibrant economy in all 14 counties allows us to protect the vulnerable and invest in the things we care about most.

My friends, the budget I present to you today was built with these outcomes in mind and to make the most of this historic moment.

***

In total, this budget invests a record $7.7 billion without raising taxes and, in fact, returns money to taxpayers.

But I want to take some time to talk through what this means because it is probably the most complex budget we have ever built.

It starts with our usual State funds, including $2 billion in the General Fund, $326 million in our Transportation Fund, and $1.9 billion in the Education Fund.

We are in the second year of a two-year Capital Bill, so while we will propose a few changes, the great work of last year will move forward.

We also start this year with a $234 million General Fund surplus and a more than $90 million surplus in the Education Fund.

And that’s the easy part.

Then, we have the Coronavirus Capital Projects Fund, the Infrastructure Investment and Jobs Act funding, ESSER 1, ESSER 2, ESSER 3, and hundreds of millions in other one-time federal funding.

***

As you know, last year we received over $1 billion from the American Rescue Plan Act, which I proposed splitting into five major initiatives: broadband and cell service; housing; climate change mitigation; water, sewer and stormwater infrastructure; and economic recovery.

You worked with me to fund about half of this proposal. And although some ARPA dollars went to other initiatives last year, I will ask you to follow through on the commitment you made to invest what’s left in the transformative and tangible infrastructure projects I originally proposed.

Because we have to remember this is one-time economic recovery money. It is imperative we use it to achieve economic equity from region to region, not as a band-aid on something we will have to address again next year and not for initiatives that do not make the most of this moment. We cannot squander this opportunity or let our legacy be defined by future deficits or higher taxes.

And that’s not just with ARPA. We need to use these principles through the entire budget. Because after years of hard work to close large funding gaps, we find ourselves at a pivotal time, with money to make a real difference.

If we are going to be successful, we must be disciplined. That means making decisions we know will give us the best return on investment. Things like lowering debt and using one-time funds for one-time expenses to solve urgent needs and long-term challenges.

If we stay focused, we will strengthen our fiscal foundation, so our economy grows in every county, leaving Vermont, our families and our communities in far better financial shape than we found them.

***

For example, as I have done every year, my budget fully funds our retirement obligations with a total payment of $394 million.

To reduce long-term debt, I propose we retire $22 million of transportation borrowing and payoff another $20 million in general obligation bonds for capital projects. This will save taxpayers millions in interest payments in the years to come.

And we will eliminate a $10 million debt in our Property Management Internal Service Fund, something you may not have ever heard of, but we have been carrying this deficit since the Dean Administration.

We can also reduce our dependency on borrowing by setting up a fund to pay cash for certain capital projects instead of putting it on the public’s credit card. This would free up money that we now pay in interest.

***

In a normal year, we might have to choose between addressing deficits and debt or investing to grow the economy and revitalize our communities. But that is just not the case this year. Because, even after taking care of the essentials, we still have resources to address our desperate need for more people in our communities, and more workers to fill the tens of thousands of jobs available in Vermont today.

Take a moment to think about the data:

Since February 2020, we have lost 24,000 people from our workforce. That 24,000 is larger than the population of every city and town in Vermont other than Burlington. It is bigger than some counties. It’s greater than the populations of Williamstown, Johnson, Highgate, Hartland, Pownal, Underhill, and Hyde Park combined. 24,000 is more workers than in the construction and lodging sectors put together.

This is a massive piece of our economy.

And we all see the “now hiring” signs, reduced hours at local businesses and shortages in healthcare and public safety. Every sector in every region is feeling the pressure. There are 23,000 jobs open in Vermont today. That’s nearly 7% of the jobs in our economy, pre-pandemic.

If we don’t work to solve this problem now, it will be there down the road in the future, and it will be much bigger and more complex. Future governors and legislators will have to make decisions that are regressive, like slashing services and raising taxes and fees to balance budgets.

But if we make it our top priority this session, we can take full advantage of the opportunity before us to reverse these trends and secure the brighter future we all want to build.

***

Let’s start by helping more workers with internships and training.

First, I’ll add $1 million to the State’s internship program, assisting employers with wages, and supporting workers who are learning new skills for a future career.

We’ll add another $1 million to VSAC’s Advancement Grants, which help adults enroll in training programs without the expense of a college degree and put people into careers with higher wages like LNAs, EMTs, line workers, and web programmers.

And we can improve how we connect employers with Career and Technical Education students and others looking for work. Right now, resources are spread across different partners, opportunities are missed, and positions go unfilled. A unified approach, using local experts to help navigate the system will put more Vermonters into available jobs. That’s why my budget invests $2.7 million to pilot this workforce network in Barre, Bennington, Brattleboro, Burlington, Rutland and St. Johnsbury. And if it works, we should expand it statewide.

***

We all know there is an urgent need in healthcare, which is why I asked for $15 million in budget adjustment to keep more nurses here, and directed $18 million in existing funds to train, retain and recruit healthcare and mental health workers.

You will also see a tax credit for nurses, as well as childcare workers, in the tax relief package I will talk about in a few minutes.

But as I have said before, if we don’t focus on the trades, we won’t have people to maintain our hospitals, transport goods, build homes, pave roads or do the work we need to support our communities.

So, my budget dedicates $10 million to reduce education costs for those working towards jobs in the trades, like CDL drivers, plumbers and welders, as well as a nursing degree.

And we are using half a million dollars of federal aid given to the Agency of Education last year to begin offering courses at some CTE centers. This will give students the skills they need to enter the electric aviation and electric vehicle sectors setting them up for high-paying careers with some of Vermont’s most innovative employers.

***

I know looking beyond our borders to recruit new Vermonters is not always a popular conversation, but it is a tool we can’t ignore.

Remember those 23,000 open positions? The truth is we just don’t have enough people to fill them. And because our workforce is aging, more and more Vermonters are retiring every day.

We all know employers need a strong workforce to grow and create jobs which communities need to thrive.

As I have noted before, “we don’t need more taxes, we need more taxpayers.”

So today, I am asking you to invest more in the new and remote worker incentive program, and to make some changes because the bill passed last year left out in-demand workers like nurse practitioners, police officers and electricians. This program has paid for itself with tax dollars from those who move here plus the money they spend buying homes and cars, shopping in stores, going to restaurants and more.

This incentive helps, but we need to do more to sell ourselves. So, I am proposing a regional network to help recruit and relocate workers and families to Vermont. This will build on ACCD’s Stay to Stay model, which created a partnership of RDCs and local chambers of commerce, and they have been quietly bringing in new Vermonters for the past three years.

I have seen the results, firsthand. When Matt and Jessica Bernhardt bumped into me at the State House while here on vacation from South Carolina, they told me they loved Vermont and one day, hoped to live here. So, we connected them to the relocation team and four months later, we had two new residents in Warren and a new designer at a local architecture firm.

But without enough funding or marketing, this initiative is not living up to its potential. To really move the needle, we have got to think bigger. So, my budget dedicates $8.5 million to this program over the next three years. It will put the horsepower of modern marketing behind it, so we can welcome more new Vermonters across the state to fill our most needed jobs.

***

And this is where housing comes in.

Even with all we have invested over the last five years, we are still not building enough. This is especially true for middle-income families looking for affordable homes.

Right now, the supply of modestly priced homes for sale is practically non-existent. As of December, the median home price was more than $369,000. As of last week, according to the Vermont Association of Realtors, there were only 136 homes for sale that a middle-income family can afford and only five in Chittenden County.

This is the middle-income housing shortage we are talking about.

Here is an example: We heard from a teacher in her mid-50s who has been searching for a home near her new job.

After several months without finding something in her price range, and her current lease coming to an end, she reached out to us in frustration because she does not feel we have done enough to help Vermonters like her. And she’s right.

So, we must do more using ARPA funds.

Between BAA and this budget, I propose $15 million to encourage the construction of homes for middle-income Vermonters like this teacher.

And with another $25 million for VHIP, we can continue to transform rundown or vacant units into livable homes. To see how well this program is working, just ask any of the families who have moved from homelessness into newly renovated apartments across the state, from Brattleboro to Bennington, Springfield to Rutland, Barre to Lyndonville, and beyond.

And we should invest another $105 million for affordable, mixed-income housing.

We need to put this money to work for working families. They are depending on us, and with some creativity, and these historic resources, we can make this happen.

***

We also need to compete with other states when it comes to tax burden and costs of living.

With a surplus in our base budget, we can make changes that Vermonters will notice in their wallets.

The $50 million progressive tax relief package I propose includes exempting military families’ retirement income from state taxes, something nearly every other state already does in some way.

This package will build on the progress we made in 2018 by exempting more retirees from income tax on their social security and further increasing the Earned Income Tax Credit, which helps low-income workers. And we can help young workers and families with a student loan interest deduction and an increase to the child and dependent care credit.

Here is what this relief package can do:

For a retired couple with an adjusted gross income of less than $65,000, including social security and a military pension, they will go from owing about $1,000 dollars in State income tax to zero. A single early-childhood educator making $18 dollars an hour won’t have to pay a dime of Vermont income tax. And no young worker will pay taxes on their student loan interest.

If you work with me to pass this package, we will help tens of thousands of Vermonters keep more of what they earn.

And with a $90 million surplus in the Education Fund, we can provide property taxpayers a rebate on what they overpaid. So, let’s return half of this surplus – $45 million – to Vermonters this year.

***

And let’s agree on how best to use the other half to equip our tech centers to support more students, with more courses, and more skills for 21st century jobs. Because this is the time to get creative, to think big, and to point students towards trades training and the lucrative careers it leads to.

On top of the CTE initiatives I have already talked about, we will use existing federal funds to encourage more students to choose this path. And let’s use remote learning tools to make it easier for CTE students to participate in on-the-job opportunities during the day.

Better integrating and normalizing trades training and tech ed is an area of tremendous importance to me, and to our state, and I look forward to working with you on this essential reform of our education system.

***

In addition, investing more in the University of Vermont will strengthen our workforce. Each year, over 1,000 new skilled workers come out of UVM to fill Vermont jobs in key areas like nursing, agriculture, and engineering. More than half of them came from other states but decided to stay. And I think it’s important to note that UVM hasn’t raised tuition in three years in order to help students. So, for the first time in 14 years, I am asking to increase UVM’s base budget by $10 million.

Our state colleges are equally important to our communities and workforce, so it’s critical for the system to continue to adapt. In our last two budgets, we appropriated $183 million to the Vermont State Colleges. They also received more than $40 million in direct payments from the Feds. This year, I dedicated another $5 million to their base budget for a total of more than $41 million.

To put this in perspective, this is $16 million higher than it was in 2017, when my administration proposed the most significant base increase the State Colleges had seen in nearly a decade.

And we should continue the successful 802 Opportunity initiative, which has already helped nearly 1,500 low-income Vermonters take classes and get training at CCV for free. If we add another $1.5 million, we can increase eligibility so that more Vermonters can learn the skills they need for good jobs.

***

We also need to do more for our kids in their earliest years.

So, let’s continue our work to expand access to affordable and high-quality childcare with changes to our Childcare Financial Assistance Program. With an additional $12 million, we can reduce the burden of missed days on parents and providers and give families more options for care and for summer and afterschool programs.

It would also reduce expenses for these families. For example, two parents making $58,000 a year with two young kids in childcare could save nearly $3,000 a year.

Just imagine what that could mean for these families.

***

Turning now to preK-12, this has been one of the most turbulent stretches we have faced. There is no doubt it has been difficult, but we will get through it.

We are going to continue to help school districts respond to the current environment so we can keep kids in the classroom. And I want to thank everyone involved for continuing to put our kids first.

I know schools are not in recovery mode yet, but that time will come very soon, and we must be ready to focus fully on reversing social, emotional and academic losses.

Fortunately, nearly $400 million in federal ESSER funds have been dedicated to preK-12, which is on top of the nearly $2 billion we invest each year.

Much of this money has gone directly to schools. The Agency of Education is also partnering with them to help students by strengthening mental health services and increasing afterschool and summer camp offerings. And this year, we will do more to reverse academic losses, by providing additional learning resources to schools and families.

But one-size is not going to fit all. We need to continue to be nimble and responsive to changes. And as with all aspects of our pandemic response, we need to work together to apply what we learn to make our education system even better and more resilient for the months and years ahead.

***

As I said two weeks ago, the impact of pandemic measures necessary before vaccines were available, extended far beyond our schools.

So, we also need to stabilize and strengthen the systems that support Vermonters’ health and well-being.

To do that, we have included $25 million to support hospitals and providers as we continue to respond to the pandemic, helping to stabilize the system and address staffing needs, which will increase in-patient beds at long-term care facilities, freeing up hospital capacity.

Last year, we piloted a mobile mental health response initiative in Rutland, which helps people when and where they are in crisis. This is making a real difference, so we will build on it with nearly $2 million more to serve four additional communities. We will also strengthen our suicide prevention program by adding nearly $1 million in funding. And with the money in the Capital Bill, we should finish the residential facility in Chittenden County by the end of this year.

My budget also increases investment for child and social services to help prevent kids from entering this system in the first place, and to better care for them when they do.

***

Isolation and other challenges created by the pandemic also affected the opioid crisis. After seeing fewer overdose deaths in 2019, sadly, we have seen increases for the last two years.

These are parents and children, friends and neighbors. We need to do more to prevent these tragedies and the addictions that led to them.

So, I propose $8 million more to strengthen local prevention and recovery efforts, expand residential treatment options, and increase employment services.

***

This work to keep communities healthy is directly connected to keeping them safe.

Law enforcement officers work hard to serve Vermonters and often are first to respond when someone is having a mental health crisis. And they are essential to ending the opioid epidemic. So, my budget will continue to place mental health professionals in all our State Police barracks.

We also fund the Criminal Justice Training Council’s request for tools to modernize entry-testing for candidates, as well as training.

We should also support E-911 and move it to the General Fund which will stabilize this critical service. And with $11 million over three years, we can create a more rational system of regional dispatch centers. This is something our small communities have urged us to do for years, and the fact is, our workforce crisis makes it necessary.

Our collaborative work on justice reinvestment has helped strengthen our criminal justice system. These efforts have helped to reduce Vermont’s out-of-state prison population, saving $1.2 million. We can invest those savings into domestic violence prevention and intervention, improving our data systems, as well as testing better models for transitional housing and care for offenders with mental health needs.

With this work, we will continue making progress toward fair and just treatment of all Vermonters.

***

Our efforts to combat climate change and protect our waterways are also essential to public health and safety.

So, I propose a $216 million package to address climate change and community resiliency. We will invest in things that reduce emissions and make our communities stronger, like electric vehicle infrastructure and incentives, weatherization, hazard mitigation, and system upgrades to ensure we can better manage and store our clean energy.

These initiatives will make us safer and move us closer to our climate goals in a way that diversifies the green economy. Importantly, rather than overwhelming Vermonters with mandates they can’t afford, we will include them in this work.

***

And just like our housing and climate change packages, I am asking you to follow through on your commitment to support ARPA-funded proposals for connectivity, water, sewer and stormwater infrastructure, and economic recovery.

Last year, we made progress on our plan to bring high-speed internet to those who had been left behind or were underserved. But there is much more to do, so let’s invest another $95 million from ARPA and commit $100 million coming from the IIJA to continue this work.

And we have a $51 million plan that would install up to 100 cell towers throughout Vermont because – just like broadband – if we want to keep and attract young workers and families, wireless service is essential.

In addition, I propose $72 million more for water, sewer, and stormwater infrastructure.

I get it. For many, these initiatives don’t sound all that exciting. But the fact is, they benefit Vermont in many ways – from clean drinking water to protecting our lakes and rivers to helping some of our smallest communities add much-needed housing, jobs, and services.

And with this funding, we can make a big difference in many small communities.

***

The reality is, we need to get creative, especially in regions that never fully recovered from our last economic crisis, and now face an even steeper climb.

So, I propose $30 million to encourage revitalization in the regions that need it most. With a new Grand List Enhancement Grant, we can use grand list value as a way to target investment to those areas.

Let’s also advance an initiative that has been stalled for the last two years, finally adding a project-based approach to TIFs. TIFs have made a big difference in Northwestern Vermont, so let’s give smaller communities the same access as bigger towns.

And we have to make sure ARPA dollars continue to help businesses and non-profits survive and recover, keeping jobs in our state and supporting the employers vital to our communities.

As I said in my State of the State, our new Capital Investment Grant program received applications far beyond what we had available for funding last year, so let’s put $50 million more towards it.

And let’s create a $20 million short-term loan initiative modeled after the Small Business Administration’s Paycheck Protection Program for those businesses and non-profits that do not have enough working capital due to the pandemic.

When you put all these ARPA-funded initiatives together, it can really transform communities, bringing economic equity to parts of our state that have been ignored for far too long.

This is the only way we can build back better and stronger than before. And that is exactly what President Biden has said he wants this federal money to do.

***

And let’s do more in the General Fund by investing in tried and tested programs that will help all our regions recover and thrive, long into the future.

I think most of us would agree that outdoor recreation is one of our state’s biggest advantages. This is why I propose putting $5 million into the Vermont Outdoor Recreation Economic Collaborative, so more communities can use these assets to strengthen their local economies. VOREC’s grant program has helped many regions across the state, like the Waterfront Recreation Trail in Newport or Rockingham’s trail connection to Bellows Falls, and marketing for Poultney’s growing trail network.

Our brownfields initiatives are also helping communities, as well as the environment, which is why – for the first time ever – we invested $25 million in State funds last year. By cleaning up these old industrial sites, we are taking vacant, contaminated properties and making them safe and usable again to revitalize a region. When you look at what has been done – like the Brownsville Butcher & Pantry or the Albany General Store – it is easy to see what an impact this essential program has made. So, we should add another $6 million this year.

Our Downtown and Village Center Tax Credit program has helped communities across the state revitalize with more housing, jobs and economic activity, and I know the Legislature has supported this as well. So, this year, let’s not only boost our annual investment to $5 million, but let’s make the neighborhoods that surround these village centers eligible as well. This program has often been the spark to bring downtowns and village centers back to life, and with this change, we can ignite more growth, pushing it out further into these communities.

Finally, let’s increase funding for municipal planning grants, so our smallest communities have the opportunity and the resources to design the future that is right for them.

***

With the increase in federal funding for transportation infrastructure, we will be able to do a lot more this year by leveraging state dollars to pull down an additional $71.9 million in federal funds.

My budget includes an increase of $38.3 million for paving, for a total of $158.8 million, which is the highest investment in paving the state has ever seen. It has increases of 37% for traffic and safety projects, 38% for road construction, and 60% for bridges.

It invests over $81 million in town programs, from bridges and roads to disaster assistance and grants. We will also do more for public transit and bike and ped projects in areas like Arlington, Chester, Moretown, Royalton and Winooski. And it will allow us to make progress on long standing commitments, like the Western Corridor upgrades that will bring rail service from Burlington to Rutland and on to New York City.

This work is another great example of how we can use these historic federal funds to make major improvements, which will have a lasting impact in our communities and on our future.

***

Now bringing what may be one of the longest budget addresses in history to a close, let me conclude by bringing us back to where we started.

We’ve all seen proposals – large and small – that could make a real difference. But they fall by the wayside because we didn’t have the resources to fund them.

That is just not the case today.

It is not an exaggeration to say that the opportunity before us is truly historic. It’s once-in-a-lifetime, and one I never expected to see happen.

There is absolutely no doubt that the economic future of our state will be defined by what we do today.

Think about that: Vermont’s economic future is in our hands.

Will we do what we’ve always done and keep getting what we’ve been getting? Or will we embrace the vision of prosperity and security – for every county, every community and every family – that’s well within our reach?

Today, we stand together at an historic intersection of both unexpected circumstance and tremendous opportunity.

The fact is, as citizens elected to lead, we are the only people who can deliver on the full potential of this moment. This also makes us the only people who could squander it.

So, my fellow Vermonters, here’s my ask of each and every one of you:

Let’s do our very best to make sure that every negotiation, every decision and every investment withstands the test of time and meets this extraordinary moment. Because we will not get a second chance.

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Office of Governor Phil Scott
109 State Street, Pavilion
Montpelier, VT 05609
Phone: 802 828-3333 (TTY: 800 649-6825)
Fax: 802 828-3339

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